This paper analyzes global commodity trends and concludes that the marked decline in real commodity prices of the past decade should be regarded as largely permanent and irreversible. The authors contend that the analysis of commodity prices should be extended to include the role of the breakdown of major international commodity agreements. In addition, the authors analyze how developments in the former Soviet Union have affected commodity supply conditions.

— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

– between years or months (e.g., 1991-92 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

/ between years (e.g., 1991/92) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

Preface

This paper is based on a study carried out in late 1993 in the Research Department of the Fund. The authors received useful comments from staff in other departments. The authors wish to thank Ximena Cheetham, Brian Casabianca, and Jared Romey for research assistance and Maria Orihuela and Elizabeth Whitely for secretarial assistance. Thanks are also due to Simon Willson of the External Relations Department who edited the manuscript and coordinated the publication process.

The opinions expressed in the paper are those of the authors and do not necessarily reflect the views of the IMF or its Executive Directors.

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